That’s right…there is a new mortgage related advertising rule! Did you miss it? Based on the chatter I have been hearing, a lot of you have. For those of you who have no idea what I am talking about, here is what you need to know. Effective August 19, 2011, an FTC rule went into effect which prohibits misrepresentation in any advertisement relating to mortgage credit products and imposes record retention requirements.
The new rule includes examples of prohibited deceptive claims, including misrepresentations about:
- the existence, nature, or amount of fees or costs to the consumer associated with the mortgage;
- the terms, amounts, payments, or other requirements relating to taxes or insurance associated with the mortgage;
- the variability of interest, payments, or other terms of the mortgage;
- the type of mortgage offered;
- the source of an advertisement or other commercial communication; and
- the consumer’s ability or likelihood of obtaining a refinancing or modification of a mortgage or any of its terms.
Additionally, the rule states that all mortgage advertising material must be retained for 24 months from the date the advertisement was last disseminated.
There is good news to pass along with this new rule! It does not apply to Federally chartered credit unions. What is the bad news you may ask? Well, the rule does apply to CUSOs and state charted credit unions.